Socialism: An Economic and Sociological Analysis

It should be already sufficiently clear from what has been said, that under Socialism, as under any other system, there could be no perfectly stationary state. Not only incessant changes in the natural conditions of production would make this impossible; quite apart from these, incessant dynamic forces would be at work, in changes in the size of the population, in the demand for commodities, and in the quantity of capital goods. One cannot conceive these factors eliminated from the economic system. It is thus unnecessary to inquire whether these changes would also involve changes in the organization of labour and the technical processes of production. For, once the economic system ceases to be in perfect equilibrium it is a matter of indifference whether actual innovations are thought of and put into practice. Once everything is in a state of flux, everything which happens is an innovation. Even when the old is repeated, it is an innovation because, under new conditions, it will have different effects. It is an innovation in its consequences.

But this is not in the least to say that the socialist system will be a progressive system. Economic change and economic progress are by no means one and the same thing. that an economic system is not stationary is no proof that it is progressing. Economic change is necessitated by the fact of changes in the conditions under which economic activity takes place. When conditions change the economic system must change also. Economic progress, however, consists only in change which takes place in a quite definite direction, towards the goal of all economic activity, e.g. the greatest possible wealth. (This conception of progress is quite free from implications of subjective judgment.) When more, or the same number of people are better provided for, then the economic system is progressive. That the difficulties of measuring value make it impossible to measure progress exactly, and that it is by no means certain that it makes men ‘happier’, are matters which do not concern us here.

Progress can take place in many ways. Organization can be improved. The technique of production can be made more efficient, the quantity of capital can be increased. In short, many paths lead to this goal.1  Would socialist society be able to follow them?

We may assume that it would entrust the most suitable people to direct production. But, however talented they were, how would they be able to act rationally if they were unable to reckon, to make calculations? On this difficulty alone Socialism must surely founder.

• 1On the difficulties a socialist economy must put in the way of the invention and, even more, of the realization of technical improvements, see Dietzel, Technischer Fort-schritt und Freiheit der Wirtschaft, Bonn and Leipzig 1922, p. 47 et seq.